Natural Resources Canada (NRCan) is responsible for advising Finance Canada, the Canada Revenue Agency (CRA) and taxpayers on engineering and scientific issues relating to the Clean Technology Investment Tax Credit (CT ITC) for clean technology property that meets the requirements of subsection 127.45(1) of the Income Tax Act.
Within NRCan, the responsibility for providing engineering and scientific advice for the CT ITC rests with the Class 43.1 and 43.2 Secretariat. The Class 43.1 and 43.2 Secretariat draws upon the expertise of NRCan’s engineering and scientific professionals to provide expert advice in many different energy technology areas.
As stated in subsection 127.45(20) of the Income Tax Act, “for the purpose of determining whether a property is a clean technology property, any technical guide, published by the Department of Natural Resources and as amended from time to time, is to apply conclusively with respect to engineering and scientific matters”.
Clean technology property
Clean technology property described in subsection 127.45(1) of the Income Tax Act includes some but not all prescribed energy conservation properties described in Class 43.1 and Class 43.2.
In addition, for some of these properties described in Class 43.1 and Class 43.2, there are additional requirements that must be met to be clean technology property (for a description of the types of properties that are eligible to be included in Class 43.1 see the Technical Guide to Class 43.1 and 43.2). Furthermore, the portion of the capital cost of clean technology property that is eligible for the CT ITC may differ from the amount that is eligible for inclusion in Class 43.1.
There are different technical guides for each of clean technology property, Class 43.1 and Class 43.2 and Canadian Renewable and Conservation Expenses. It is important that the appropriate technical guide be used for determining eligibility for a particular incentive.
The following series of CT ITC technical guides has been developed by NRCan for each of the following categories of clean technology property:
- Photovoltaic Electrical Generation Equipment
- Wind Energy Conversion Systems
- Small-Scale Hydro-Electric Installations (under development)
- Water-Current, Tidal or Wave Energy Equipment (under development)
- Geothermal Energy Equipment (under development)
- Electrical Energy Storage Equipment
- Pumped Hydroelectric Storage Equipment (under development)
- Active Solar Heating Equipment (under development)
- Ground-Source Heat Pump Systems (under development)
- Air-Source Heat Pump Systems
- Non-Road Zero Emission Vehicles (under development)
- Electric Vehicle Charging Equipment that is used primarily for non-road zero-emissions vehicles described in Class 56 (under development)
- Hydrogen Refuelling Equipment that is used primarily for non-road zero-emission vehicles described in Class 56 (under development)
- Concentrated Solar Energy Equipment (under development)
- Small Modular Nuclear Reactors (under development)
Certain terms used in the technical guides, including the terms that are defined in subsection 127.45(1) and 248(1) of the Income Tax Act, are summarized in the Glossary of Terms. Terms and excerpts from the Income Tax Act and the Income Tax Regulations are italicized.
Additional resources:
- Glossary of Terms
- Key to Symbols Used in Schematics (under development)
Contacting NRCan for technical guidance on clean technology property
You may request general guidance or a formal written technical opinion from NRCan, as to whether equipment in a planned or completed project meets the engineering and scientific requirements of clean technology property. This is a voluntarily step and any technical opinion issued by NRCan to the taxpayer is not binding on the CRA, in determining eligibility and entitlements to the CT ITC, under 127.45(1) of the Income Tax Act.
Contact NRCan for technical guidance on clean technology property